Posted Jan 15, 2008, 6:33 AM
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Loving SA 365 days a year
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Join Date: Feb 2007
Location: San Antonio
Posts: 3,891
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[SA] In '08, San Antonio could outperform state economy wise
http://www.mysanantonio.com/business...n.4f41233.html
Quote:
S.A. economy keeps chugging along
Web Posted: 01/14/2008 07:48 PM CST
William Pack
Express-News Business Writer
Strong commercial construction activity and the first strides in a planned multibillion-dollar expansion of the city's military facilities should keep San Antonio's dependable record of economic growth going this year.
The growth may not be as strong as it was in 2007 or the prior two years. But it should outpace other cities slammed by the national housing slump and could outperform the state as a whole, experts said.
Keith Phillips, senior economist with the San Antonio office of the Federal Reserve Bank of Dallas, said the performance should reinforce the area's reputation as one that does not hit the heights during booms or fall significantly during recessions. It maintains a steady pace.
"I expect 2008 (growth) to be down from 2007, but still positive — consistent with a growing, moderately paced economy," Phillips said.
Steve Nivin, chief economist with the city's Economic Development Department, said he believes the San Antonio economy will perform "fairly well," with employment growth of 2 percent or slightly more.
"I don't see anything that sets off alarms," Nivin said.
What most interested local officials last year was the fate of an omnibus spending plan that contained $7.2 billion for military base redevelopment activity already authorized by Congress. Part of that would fund up to $1 billion worth of improvements for bases in San Antonio, or about half of the spending projected for San Antonio as a result of the most recent base closure and realignment process.
Officials had hoped to put $1 billion in projects under contract by March. That would be 10 times the normal amount of military spending in San Antonio and one of the largest military construction programs ever undertaken in the city. Included would be improvements at Brooke Army Medical Center and Wilford Hall Medical Center, including new dormitories for the 9,000 medical students who would train in San Antonio.
Mayor Phil Hardberger said the projects would constitute "quite a boom for San Antonio."
Officials also are keeping their fingers crossed that San Antonio will be selected by the Homeland Security Department as the site for a $500 million lab studying deadly agricultural diseases. That decision is not expected until late in the year, but Nivin believes the city has a good shot at getting it.
Military officials won't be the only ones looking for construction cranes and workers this year. The commercial construction sector also could soar, with major retail, office space and industrial projects in the works.
"It's a very positive outlook for 2008, not just because of what is being developed, but demand is also keeping pace with supply," said Kimberly Gatley, who tracks commercial activity as a senior vice president at NAI REOC Partners.
The relocation of Rackspace Managed Hosting to Windsor Park Mall, which will bring an expansion of jobs, should bolster high-tech prospects. Tourism, which could feel the pinch of high fuel prices, will get a big boost from the NCAA Final Four men's basketball tournament in April and the new Rock 'n' Roll Marathon, which has drawn more than 21,000 competitors to other cities.
Farmers and ranchers, though concerned by an impasse over the new farm bill, were hoping that strong prices for crops and livestock would continue this year.
Phillips, at the Federal Reserve, said he foresees the energy sector in the state growing strongly during the year, but high-tech activities slowing if consumer spending weakens.
The retail sector held up well in San Antonio last year and may fall off some in 2008, the economist said. If energy prices increase more than has been forecast, the drop-off could be steep.
"The consumer can only do so much," Phillips said.
But he said the area's employment outlook should stay strong, with low unemployment and job growth only about a half-point below last year's 2.7 percent growth rate.
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